TaxTMI 
TaxTMI 
2025 (5) TMI 435
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....iness premises of the assessee on 20.10.2008. The proceedings under section 153A for the year under appeal were initiated by issuance of notice on 29.03.2010. In response to which the assessee had filed the return of income on 29.04.2010, declaring income at INR 29,630/-. The assessment was completed under section 153A/143(3) of the Act on a total income of INR 14,41,21,790/- by making various additions/disallowances. 3. In first appeal, the Ld. CIT(A) has allowed part relief to the assessee. Against the said order of ld. CIT(A), the assessee as well as the Revenue is in appeal before us. The assessee has challenged the appellate order on the following grounds of appeal:- 1. "That on the facts and circumstances of the case and the provisions of law, the Ld CIT Appeals has failed to appreciate that the notice issued u/s 153A and assessment order passed by the Ld AO u/s 153A/ 143(3) is illegal, bad in law, without jurisdiction. The additions made/sustained are unjust, unlawful and arbitrary and are made against the principles of natural justice. 2. That on the facts and circumstances of the case and the provision of law, the Ld CIT Appeals has failed to appreciat....
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....is order is based on surmises, conjectures and suspicion. 8. That the Appellant craves the right to amend, append, delete any or all grounds of appeal." 4. The Revenue has challenged the appellate order on following grounds of appeal:- 1(i) "That the Ld. CIT(A) has erred in laws and facts in deleting the addition of Rs. 5,50,00,000/- made by A.O. on account of unaccounted portion of the sale consideration received by the assessee on sale of property A-8, westend, New Delhi on the basis of agreement to sell of the said property found and seized and thus the assessee understated the sale consideration with respect to the said property. (ii) That the Ld. CIT(A) has erred in laws and facts in deleting the addition of Rs. 56,00,000/- towards rent paid for property at A- 48/10, Vasant Vihar, New Delhi as the premises was never taken on rent for business purpose as per reply by the assessee before the A.O. (iii) That the Ld. CIT(A) has erred in laws and facts in deleting the addition of Rs. 6,33,926/- on account of foreign travel by directors along with their family members being not for business purposes and was a pleasure trip. (iv) That t....
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....s sold its share in the said property for a sum of INR 6,80,00,000/- in the subsequent year and the income/loss was duly declared in the subsequent year. Ld. AR submitted that in the said paper, opening cost of work in progress of the project at Westend, New Delhi was noted at INR 2,43,62,710/- which is duly matching with the cost recorded in the books of accounts maintained in the regular course. The cost incurred during the year under various heads was also duly recorded in the books of account and the necessary copy of ledger accounts and other details were submitted before the AO as well as before the Ld.CIT(A). He further submits that except the document No.A-4 page-10, no other corroborative evidence was found as a result of search which could lead to believe that the assessee has incurred construction cost of more than the cost recorded in the books of accounts. He drew our attention to Paper Book page 218 to 221 which are year-wise details of work in progress of various projects including A-8 Westend, New Delhi and argued that in the subsequent year i.e. 2009-10, loss of INR 84,15,403/- was declared in the return of income filed and duly accepted by the Revenue, therefore, ....
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.... with proper explanation however, assessee has failed to do before the lower authorities nor even before us. While confirming the addition, the Ld. CIT(A) in para 20 of the impugned order has observed as under:- 20. "I have considered the facts of the case, the basis of the additions made by the A.O. in the assessment order, the arguments of the A.R. during the assessment as well as appellate proceedings. It is submitted by the AR that the perusal of the assessment order clearly shows that the AO has proceeded to make the observations after pursuing of the noting in the seized records. He did not confront the impugned discrepancies to the assessee so as to seek his explanation on the same. This means a one sided view had been taken. The perusal of the submissions of the appellant company shows that there was an expenditure of Rs. 7,69,15,403/- with reference to the property at A-8, Westend incurred up to A.Y. 2009-10. The said property had been sold for an amount of Rs. 6.85 crore in the A.Y. 2009-10. It is further seen that the appellant had claimed that the figure of total expenses of Rs. 6,46,49,715/- as recorded in the seized document was prepared by an accountant to a....
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....raised by the assessee is with regard to claim of deprecation on Gym equipments. 14. The AO while disallowing the deprecation claimed by the assessee on gym equipment's has observed that in preceding years, the depreciation of Gym equipments was disallowed by observing that the Gym was not installed at the business premises. 15. Before us, the Ld.AR for the assessee submitted that the Gym was installed at the office premises and the depreciation was claimed on WDV basis. Since these equipments were used by the staff for betterment of their health and life style therefore, its depreciation claimed deserved to be allowed under business expediency. 16. On the other hand, the Ld.CIT DR supports the orders of the lower authorities and submits that during the course of search, these equipments were not found installed in the office of the assessee therefore, it could not said that these were used by the office staff. Further in earlier years such disallowance was made and confirmed thus as per principle of consistency the disallowance should be uphold. 17. After considering the arguments of both the parties, we find that it is not the first year that the depreciation on the G....
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.... Agreement alongwith evidence of refund of advance amount received earlier were also filed before the lower authorities which are available at Page 262 to 265 of the Paper Book. The Ld.AR for the assessee further submits that the assessee has refunded the advance amount of INR 3 crores to Shri R.C.Puri through banking channel. He further submits that ultimately the property was sold to M/s. Prerna Infradevelopers Pvt. Ltd. for INR 6.5 crores in terms of Agreement to Sell made and executed on 19.11.2008. The Ld.AR for the assessee further submits that the stamp authority has accepted the sale consideration of INR 6.5 crores which was disclosed in the agreement. Moreover, the assessee has also received INR 35.00 Lakhs for extra work which is also not in dispute. Ld AR further stated that the sale was taken place in subsequent assessment year and even otherwise addition, if any, is to be made on this account, the same should be made in the year when the property was sold and not in the present year where the assessee has entered into an agreement which was later cancelled. Accordingly, he submits that the Ld. CIT(A) after considering these facts has deleted the addition which deserves....
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.... premise was used for the purpose of business and thus the payment of rent is business expenditure. He thus requested for the confirmation of the order of Ld.CIT(A), deleting the disallowance so made after appreciating these facts. 29. We have heard the rival submissions and perused the material available on record. It is seen that the assessee is maintaining its office at A-48, Vasant Vihar, New Delhi where search was carried out and Panchnama was drawn during the search. This clearly established that premise in question i.e. A-48, Vasant Vihar, New Delhi was occupied by the appellant company for its office. This is a clear evidence that the assessee business premise was situated at this place. The assessee had filed all the necessary evidences such as rent agreement, ledger account, TDS certificate, bank statement and ownership proof in the hands of the landlord. The assessee has claimed depreciation of the assets installed at this premise which has been allowed. Merely for the inadvertent error of not intimating this premises in the reply filed, cannot be the sole basis of making disallowance by ignoring ample evidences filed by the assessee. Under these circumstances, we fin....
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....me as business expenditure therefore, he humbly prayed that such order deserves to be upheld. 34. After considering the arguments put forth by both the parties, we find that the AO simply on assumption and presumption basis has made the disallowance. From the details filed during the course of appellate proceedings as additional evidences which are discussed by the Ld.CIT(A) in para 13 of its order, it is seen that the assessee has been able to demonstrate that the travelling were carried out for business purposes and ultimately marble was purchased from Italy and brought to India through Italian Freight carriers, Vapi Akash Stone Industries Ltd. Silvassa. It is also seen that in addition to the travelling undertaken by the Directors, Shri Inder Mohan Thapar & Smt. Jaspreet Thapar, one Shri Naveen Punjabi who is the employee of the assessee company also visited Italy for making selection of the marble, stone etc. Thus, it is not a case where pleasure trips were carried out. The Ld.CIT(A) while deleting the disallowance in para 31 has observed as under:- 31. "I am in agreement with the appellant company's submissions on the issue of admission of additional evidence as the ....
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....75 Lakhs being fee paid to the Court was added to the total cost. Thereafter the assessee company had paid total amount of INR 3,81,00,814/- to the owners in terms of MCD mutation. 38. Besides this, the assessee also incurred a sum of INR 1,16,771.63 during FY 2006-07 relevant to AY 2007-08. Thus, the total cost as on the first day of the previous year as incurred by the assessee on this property was INR 4,63,25,814/. During the year under appeal in terms of agreement dated 10.05.2007, the assessee has transferred the rights of construction in favour of the Upal Construction P.Ltd. for a total consideration of INR 4.50 crores which was duly received by the assessee company. In this process, the assessee company had incurred loss of INR 14,42,585/-. 39. The Ld.CIT(A) after considering these facts, has deleted the additions made on presumption basis against which the Revenue is in appeal. 40. Before us, the Ld.CIT DR supported the order of the AO and submitted that it is not acceptable that a person is having incurred cost of more than INR 4.64 crores on the property situated at the prime location at Vasant Vihar, New Delhi thereafter, relinquish rights of construction in te....
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....ing the course of appellate proceedings, the assessee filed additional evidences which includes Agreement to Sell with Shri R.C.Puri, the cancellation agreement and it was submitted that the amount was received as advance for sale of property at A-8, Westend for which the AO has already made an addition by treating the said sale consideration of INR 12 crores. Accordingly, the CIT(A) has deleted the addition. 44. Before us, the Ld.CIT DR for the Revenue supported the order of the AO and submitted that since the assessee has not being able to discharge the burden casted upon it proving the creditworthiness of the parties who had given the advance therefore, the addition was rightly made and he requested for restoration of the same. 45. On the other hand, Ld.AR for the assessee vehemently supported the order of the Ld.CIT(A) and submitted that the AO has taken into consideration the Agreement to Sell executed between the assessee and Shri R.C.Puri where the assessee had agreed to sale the property A-8, Westend at INR 12 crores and received advance of INR 3 crores. Based on this agreement, the AO had made an addition of INR 5.5 crores and simultaneously on the other hand, it dou....